98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5733

 

Introduced , by Rep. Mary E. Flowers

 

SYNOPSIS AS INTRODUCED:
 
New Act
30 ILCS 105/5.855 new
215 ILCS 5/155.44 new

    Creates the Public Health Insurance Option Act. Creates the Health Insurance Connector Authority (the Connector) as a body politic and corporate and a public instrumentality, which shall be an independent public entity not subject to the supervision and control of any other executive office, department, commission, board, bureau, agency, or political subdivision of the State, except as specifically provided in law. Provides that the Health Insurance Connector Authority shall provide for the offering a public health benefits plan (the public option) to eligible individuals and groups, in order to ensure choice, competition, and stability of affordable, high quality coverage throughout the State. Sets forth provisions concerning availability, the executive director of the Connector, reporting, premium rates, payment rates, health care providers, and the creation of the Public Health Insurance Option Trust Fund. Amends the State Finance Act to create the Public Health Insurance Option Trust Fund as a special fund in the State treasury. Amends the Illinois Insurance Code. Authorizes the Director of Insurance to make an assessment against all health plans, health insurers, and health maintenance organizations in the State, as well as the public health insurance option established by the Public Health Insurance Option Act, if the actuarial risk of the enrollees of such plans or coverage for a year is less than the average actuarial risk of all enrollees in all risk-adjusted. Makes other changes.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the Public
5Health Insurance Option Act.
 
6    Section 5. Definitions. Unless the context clearly
7requires otherwise, in this Act:
8    "Carrier" means an insurer licensed or otherwise
9authorized to transact accident and health insurance; a
10nonprofit hospital service corporation; a nonprofit medical
11service corporation; or a health maintenance organization.
12    "Connector" means the Health Insurance Connector
13Authority.
14    "Connector Board" means the board of the Health Insurance
15Connector Authority.
16    "Connector seal of approval" means the approval given by
17the Connector Board to indicate that a health benefit plan
18meets certain standards regarding quality and value.
19    "Eligible individual" means an individual who is a resident
20of this State; provided that the individual is not offered
21subsidized health insurance by an employer with more than 50
22employees.
23    "Eligible large groups" means groups, any labor union,

 

 

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1educational, professional, civic, trade, church,
2not-for-profit, or social organizations or firms,
3corporations, or partnerships or associations actively engaged
4in business that on at least 50% of its working days during the
5preceding year employed at least 51 employees.
6    "Eligible small groups" means groups, any sole
7proprietorship, labor unions, educational, professional,
8civic, trade, church, not-for-profit, or social organizations
9or firms, corporations, or partnerships or associations
10actively engaged in business that on at least 50% of its
11working days during the preceding year employed at least one
12but not more than 50 employees.
13    "Health benefit plan" means any individual, general,
14blanket, or group policy of accident and health insurance
15issued by an insurer licensed under the Illinois Insurance
16Code; a group hospital service plan issued by a non-profit
17hospital service corporation; a group medical service plan
18issued by a non-profit medical service corporation; a group
19health maintenance contract issued by a health maintenance
20organization; or coverage for young adults health insurance
21plan. "Health benefit plan" does not include accident only,
22credit-only, limited scope vision or dental benefits if offered
23separately; hospital indemnity insurance policies, if offered
24as independent, non-coordinated benefits, which, for the
25purposes of this Act, means policies that provide a benefit not
26to exceed $500 per day, to be paid to an insured or a

 

 

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1dependent, including the spouse of an insured, on the basis of
2a hospitalization of the insured or a dependent; disability
3income insurance; coverage issued as a supplement to liability
4insurance; specified disease insurance that is purchased as a
5supplement and not as a substitute for a health plan and meets
6any requirements the Director of Insurance by rule may set;
7insurance arising out of a workers' compensation law or similar
8law; automobile medical payment insurance; insurance under
9which benefits are payable with or without regard to fault and
10that is statutorily required to be contained in a liability
11insurance policy or equivalent self-insurance; long-term care,
12if offered separately; coverage supplemental to the coverage
13provided under 10 U.S.C. 55, if offered as a separate insurance
14policy, or any similar policies issued on a group basis;
15Medicare Advantage plans; or Medicare prescription drug plans.
16A health plan issued, renewed, or delivered after the effective
17date of this Act to an individual who is enrolled in a
18qualifying student health insurance program shall not be
19considered a health plan for the purposes of this Act. The
20Director of Insurance may by rule define other health coverage
21as a health benefit plan for the purposes of this Act.
22    "Public option" means the public health benefits plan
23offered through the Connector, established by Section 15 of
24this Act.
25    "Trust Fund" means the Public Health Insurance Trust Fund,
26established in Section 40 of this Act.
 

 

 

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1    Section 10. Health Insurance Connector Authority. There
2shall be a body politic and corporate and a public
3instrumentality to be known as the Health Insurance Connector
4Authority, which shall be an independent public entity not
5subject to the supervision and control of any other executive
6office, department, commission, board, bureau, agency, or
7political subdivision of the State, except as specifically
8provided in law. The exercise by the Connector of the powers
9conferred by this Act shall be considered to be the performance
10of an essential public function.
 
11    Section 15. Public health insurance option. The Health
12Insurance Connector Authority shall provide for the offering a
13public health benefits plan (the public option) to eligible
14individuals and groups in order to ensure choice, competition,
15and stability of affordable, high quality coverage throughout
16this State. The public option shall:
17        (1) be made available exclusively through the
18    Connector, alongside health benefit plans receiving the
19    Connector seal of approval;
20        (2) meet all the requirements established for health
21    benefit plans to receive the Connector seal of approval;
22    and
23        (3) meet the Connector's standards for minimum
24    creditable coverage.
 

 

 

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1    Section 20. Availability. The public option shall be made
2available to eligible individuals and eligible small groups
3through the Connector no later than January 1, 2016. The public
4option shall be made available to eligible large groups no
5later than July 1, 2016.
 
6    Section 25. Executive director. The executive director of
7the Connector may contract with managed care organizations or
8other such health benefits administrators to administer
9aspects of plans offered under the public option.
10Notwithstanding any general or special law to the contrary, the
11executive director shall collaborate with the Director of
12Healthcare and Family Services and the Director of Insurance to
13ensure that only Medicaid managed care organizations that have
14contracted with the State as of January 1, 2015 to deliver such
15managed care services are so contracted with to administer
16aspects of the public option. The executive director may accept
17applications from non-Medicaid managed care organizations for
18the provision of such services after January 1, 2017. The
19executive director may adopt rules to implement this Act.
 
20    Section 30. Reporting. A report on the activities,
21receipts, expenditures, and enrollments of the public option
22shall be included in the Connector's annual reports and shall
23be subject to the prescription and oversight of the Connector

 

 

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1Board and Auditor General.
 
2    Section 35. Premium rates. The Connector Board shall
3establish premium rates for the public health insurance option
4at a level sufficient to fully finance the costs of:
5    (1) health benefits provided by the public option; and
6    (2) administrative costs related to operating the public
7option.
 
8    Section 40. Payment rates. The Connector Board shall
9establish payment rates for the public option for services and
10providers based on parts A and B of Medicare. The Connector
11Board may determine the extent to which adjustments to base
12Medicare payment rates shall be made in order to fairly
13reimburse providers and medical goods and device makers, as
14well as to maintain a strong provider network.
 
15    Section 45. Health care providers. Health care providers,
16including physicians and hospitals, participating in Medicare
17are participating providers in the public option unless they
18opt out through a process to be established by the Connector
19Board. This opt-out process must ensure that:
20        (1) no provider shall be subject to a penalty for not
21    participating in the public option;
22        (2) the Connector shall include information on how
23    providers participating in Medicare who chose to opt out of

 

 

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1    participating in the public option may opt back in; and
2        (3) there shall be an annual enrollment period in which
3    providers may decide whether to participate in the public
4    option.
 
5    Section 50. Fund. There is hereby created as special fund
6in the State treasury the Public Health Insurance Option Trust
7Fund (the Trust Fund). Amounts credited to the Trust Fund shall
8be expended without further appropriation for the operation of
9the public option. Not later than January 1, 2017, the State
10Comptroller shall report an update of revenues for the current
11fiscal year.
 
12    Section 900. The State Finance Act is amended by adding
13Section 5.855 as follows:
 
14    (30 ILCS 105/5.855 new)
15    Sec. 5.855. The Public Health Insurance Option Trust Fund.
 
16    Section 905. The Illinois Insurance Code is amended by
17adding Section 155.44 as follows:
 
18    (215 ILCS 5/155.44 new)
19    Sec. 155.44. Assessments.
20    (a) The Director is hereby authorized to make an assessment
21against all health plans, health insurers, and health

 

 

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1maintenance organizations in the State, as well as the public
2health insurance option established by the Public Health
3Insurance Option Act (which shall be referred to as
4risk-adjusted health plans), if the actuarial risk of the
5enrollees of such plans or coverage for a year is less than the
6average actuarial risk of all enrollees in all risk-adjusted
7health plans for such year. Self-insured group health plans
8subject to the provisions of the Employee Retirement Income
9Security Act of 1974 are exempted from the risk adjustment.
10    (b) Using the criteria and methods developed under
11subsection (c) of this Section, the Director shall provide a
12payment to risk-adjusted health plans (with respect to health
13insurance coverage) if the actuarial risk of the enrollees of
14such plans or coverage for a year is greater than the average
15actuarial risk of all enrollees in all risk-adjusted health
16plans for such year that are not self-insured group health
17plans subject to the provisions of the Employee Retirement
18Income Security Act of 1974.
19    (c) The Director shall establish criteria and methods to be
20used in carrying out the risk adjustment activities under this
21Section. In calculating the actuarial risk of risk-adjusted
22health plans, the Director may utilize data, including, but not
23limited to, enrollee demographics, inpatient and outpatient
24diagnoses (in similar fashion as such data are used under parts
25C and D of Title XVIII of the Social Security Act), and such
26other information as the Director determines may be necessary,

 

 

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1such as the actual medical costs of enrollees during the
2previous year. Upon request, the risk-adjusted health plans
3shall make information available to the Department of Insurance
4for the purposes of risk adjustment under this Section. The
5information shall be limited to the minimum amount of personal
6information necessary, shall be confidential, and shall not
7constitute a public record.